GFRS # Article 1: WHY GLOBAL FINANCIAL REPORTING STANDARDS
Hi
Friends!
Lately
I have received dozens of queries from CA final students. Students from different
parts of India but the question is same “Which subject should I choose in
elective paper 6 in CA Final”?
PART 1: WHAT ARE THE OPTIONS AVAILABLE ?
First, let us check out the six options given out of which we have to choose:
· 6A: RISK MANAGEMENT
· 6B: FINANCIAL SERVICES AND CAPITAL MARKETS
· 6C: INTERNATIONAL TAXATION
· 6D: ECONOMIC LAWS
· 6E: GLOBAL FINANCIAL REPORTING STANDARDS
· 6F: MULTI-DISCIPLINARY CASE STUDY
At
times, having many choices will make decision making difficult. And especially,
the same student asks the same question with different faculties and they give
different answers creates more confusion and you feel you are on X roads.
PART 2: WHICH ONE IS THE BEST?
Without
loss of generality, if you ask tax faculty – his suggestion would be
international taxation and if you ask law faculty – his suggestion would be
economic laws and so on and so on. But what you need to understand here is,
there are few factors which you have to consider before making a final decision.
They are
- The efforts required to master the paper and to pass the exam
- Availability of quality lectures and materials which makes your life simple
- And most importantly, the scope after clearing the course (since this paper is almost like a super specialisation)
So, my
dear friends choose it wise. Your career can take off due to this paper and
this can be an entry ticket in the interview.
This
article is regarding the newly introduced elective
paper (Paper 6) as part of the CA Syllabus. You would all be wondering
which paper to choose, as this is an unfamiliar area to everyone out there.
Every paper has its own
advantages, disadvantages and challenges. But I suggest you to go ahead with
GFRS i.e., paper 6E. The next question is “WHY”? In this article, I am going to
talk about the reasons why “GLOBAL
FINANCIAL REPORTING STANDARDS” is a good choice to make.
You
know that the financial statements are to be prepared based on the financial
reporting framework. What is acceptable financial reporting framework depends
on the accounting regulations of a given country and the laws & regulations
of the specific land. However due to the changes in accounting globally to
adapt to the ever dynamic international environmental factors, almost all the
countries accepted to harmonise the domestic standards with IFRS. In this
context, IFRS have got the significance which we haven’t seen in the past. In
India, the Institute of Chartered Accountants of India decided to comply with
IFRS requirements through developing domestic standards which are in lines with
these global standards. The standards developed by ICAI for the above purpose
are called IND AS (Indian Accounting Standards).
If
you are in CA Final course in new curriculum, you know the weightage of Ind AS in
your financial reporting paper. Practically there is nothing in the paper other
than IND AS (except petty topics). In this context substantial part of the
accounting you are studying in CA Final is actually global standards itself. If
you opt for Global financial reporting standards in elective paper 6, it is
like one shot two birds. There is a commonality of more than three fourths in
both the papers. So, what are you waiting for! Let us take it forward.
International Financial
Reporting Standards, usually called IFRS, are standards issued by the IFRS
Foundation and the International Accounting Standards Board (IASB) to
provide a common global language for business affairs so that company
accounts are understandable and comparable across international boundaries.
PART 4: WHAT IS THE SYLLABUS
OF GFRS:
As
given in the ICAI website, the syllabus of this paper includes IND AS; as discussed in Modules 2 to 5 of
the core Paper 1 on Financial Reporting except headings 1.1 to 1.7 of Chapter 4
Unit 1. It also includes a portion on significant differences between IFRS and
US GAAP. The marking scheme of the paper will be as follows:
|
AREA
|
MARKS
|
|
Conceptual Frame work for Financial Reporting as per IFRS
|
10 marks
|
|
Application of International Financial Reporting Standards
|
70 marks
|
|
Significant difference between IFRS and US GAAPs
|
20 marks
|
On brief reading of the above
mentioned syllabus, you can understand that the major crux of this paper is
knowledge regarding IFRS and IND AS which is already dealt with in Paper 1:
Financial Reporting. So, you would just need to add on the portions you already
know making it easier to comprehend.
As per the table given above, you can
see that the Application of International Financial Reporting Standards
consists of 70 marks and this consists of Case Study questions, which makes it
interesting to learn.
From the work
perspective, the study of this paper will increase your competence and give you
an edge over other candidates when it comes to Global accounting and financial
markets. (No doubt, this is going to be your USP in interview and will help in
surpassing the others).
I will be releasing
series of blogs on this paper and will try to cover 100% of the syllabus through
these blogs to help the students nurture the topic and to come up in exams with
flying colours. What you need to do is, just keep reading the blogs and any
doubts you have, you can post them either in the comments section or by way of
a direct mail to capclasses@yahoo.com
Hope this article
gave you an idea regarding the syllabus you have to deal with in Global
Financial Reporting Standards and helped you in making a choice! All the best
for your exams!
Thanks for the love
and keep supporting us. Happy reading and good luck.
YOU
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